Rural and community banks have a key role in making a positive contribution towards the reduction of poverty. They also act as one of the key channels to distribute funds to businesses in their localities and encourage the spread of sound entrepreneurial activity.

It is believed that Rural and Community Banks (RCBs) can play a key role in the country’s economic development and ultimately act as a catalyst to stimulate rural economy by supporting micro and SME businesses based in rural areas.

According to her, JCS Investments Limited, among others, was currently working with selected rural and community banks as part of a comprehensive plan to move the RCBs to the next level by listing on the Ghana Alternative Market (GAX) and working with key stakeholders to improve operations and add value.

The company has identified some key activities that can go towards developing this initiative which may include listing RCBs on the GAX, encouraging business advisory firms to work closely with the RCBs to help them adapt to their newly listed status and ensuring they have transparent systems and helping the RCBs to raise capital for lending and increase their portfolio sizes.

Listing on GAX

The listing of rural banks on the GAX is one of the steps JCS Investments Limited and others are championing to bring value to both existing and new shareholders which will eventually create opportunities for people who are interested in subscribing to shares on the GAX.

JCS Investments Limited is currently promoting the listing of RCBs on the GAX to open up new opportunities. It is hoped that the initiative will also encourage the RCBs to increase the percentage of their allocated raised capital directed towards Positive Gender Lens investments. This initiative, according Ms Patricia Safo, should contribute positively towards the promotion of business initiatives by women in the areas where these banks are located.

Ms Safo was very emphatic that on the global stage, the investment in sustainable ventures and the use of renewable energy were important in meeting the challenges facing the planet.

Rural banks in Ghana

The ARB Apex Bank Limited, a mini central bank that offers support services to rural and community banks, has endorsed the initiative by JCS Investment Limited and offered its endorsement. According to the Managing Director (MD) of ARB Apex Bank, Kojo Mattah, ‘’there are some public relations benefits to listing shares or bonds as they are listed for exposure to the general public and available for trading as well. Should an RCB list its shares, this also gives current shareholders a market on which they can liquidate some or all of their shares’’.

That, he said, would also provide price transparency to shareholders, as well as to potential buyers of the shares, and listed shares may also prove to be more readily accepted as collateral, should the security holder need it.

JCS Investments Limited, working with its investment partner over the last 20 years, has gained in-depth experience relating to the operation of rural banks in Ghana.

JCS subsequently invested, by way of equity in the Nwabiagya Rural Bank, and has now completed a partial exit (as part of a phased process of withdrawal).

The company is presently working closely with Innovative MicroFinance Limited and seeking to promote rural economic development and Positive Gender Lens investments in the Northern Region.

JCS believes that RCBs can provide an additional channel to deliver essential financial services. The aim is to work with RCBs of good standing. This initiative can contribute to poverty reduction and help in bridging the gap between urban areas and the rural economy. As part of its policy of rural economic business building, JCS also works closely with a number of farmers and processors operating in the rural economy. The reality is that many are still unable to raise the much-needed capital to move their businesses forward.

The proposal to work with selected rural banks and promote listing on the GAX builds on a solid foundation.The JCS has already been in consultation with some of the key stakeholders, including the Apex Bank, GAX and the USAID Financing Ghanaian Agriculture Project.